How fee earners can command high margin work: explicit strategies and actions

Description

The latest is the Economist which recently concluded that, even after the recession: "As they adapt to survive a tougher climate lawyers will need to ensure that any changes do not put their culture of professionalism at risk". In the light of buffeting from recession, client budgetary pressure, commoditisation, purchasing professionals and new forms of competition, practices are sweating to implement initiatives to cope with increased demands for price pressure and efficiency. They range from effective tendering and prioritisation of key clients to sector skills and outsourcing initiatives.

In this scurry to respond, though, there is a danger that a valuable and powerful heritage is being eroded: a track record of high margin, lucrative and influential projects. The profession includes some of the worldâ€™s most successful, enduring and profitable businesses. Some European legal practices are nearly three hundred years old and throughout their entire history have earned remarkable profits. The net margins of leading practices are normally two to three times those of the business clients they serve.

This is not just true of law firms. Practices in other professions routinely deliver high margin work to their owners. They include consultants Mckinsey, accountants like Deloitte, leading business schools (like Harvard and Wharton) and some well placed individuals (like legal consultant David Maister, head-hunter Anna Mann and architect Lord Rogers). These successful, high margin practices have a number of approaches in common. Whilst they arrive at them intuitively, by trial and error, they point to an emergent strategy that fee earners can use to position their work and personal franchise.